Shares of Avon have hit a new all-time low, slipping below $3 a share on the heels of weak second quarter financial results and a management shakeup. Is there more downside ahead?

The cosmetics company’s chief executive is the latest corporate top dog to fall victim to the displeasure of activist investors. Avon announced Thursday morning that Sheri McCoy, who has run the company since 2012, will step down in March amid a stumbling turnaround and continued losses.

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In a separate announcement, Avon, which sells cosmetics and other beauty products through millions of representatives worldwide, unveiled miserable second quarter financial results which showed weakness in Latin America and other emerging markets.

At $3.06 a share, the stock price has fallen 8.9% after earlier dropping more than 13% to just under $3 a share, a new all-time low.

Stifel analyst Mark Astrachan maintained his hold rating on Avon but warned that the stock has more downside than upside amid mounting challenges and worsening sales declines.

...Overall we believe challenges are accelerating, with visibility lacking. We believe Avon continues to lose share and consumer relevance in a number of key markets, increasing the difficulty in achieving a sustainable improvement in sales growth and operating margin, particularly given worsening sales trends while reinvestment increases. We maintain our Hold rating but believe there is more downside than upside. Additionally, we think free cash flow expectations continue to be worse than expected, with the company now reducing capex expectations for 2017, and could increase questions surrounding ability to repay debt due beginning in 2019 should a material improvement not be seen in 2018.

Increase in capex now only $20M in 2017 vs. previous guidance of $65M. Very concerning to us is that AVP lowered its guidance for increased capex investment in 2017 - this implies worse-than-planned cash flow performance and it could also further delay AVP's turnaround progress, which requires incremental investment.

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